Kinross Gold Corporation · TSX:K
Kinross Gold — Q2 2010 Earnings Presentation
25 slides from Kinross Gold's earnings presentation, Aug 5, 2010
Slide 1: Delivering Disciplined Growth: Q2 2010 Results Webcast
Delivering Disciplined Growth Q2 2010 Financial and Operation Results Webcast August 5, 2010
Slide 2: Speakers
Speakers Tye Burt Thom Boehlert Tim Baker Ken Thomas President & CEO Executive Vice‐President Executive Vice‐President Senior Vice‐President, & CFO & COO Projects 2
Slide 3: Cautionary Statement on Forward-Looking Information
Cautionary Statement on Forward‐Looking Information All statements, other than statements of historical fact, contained or incorporated by reference in this presentation, including any information as to the future financial or operating performance of Kinross, constitute “forward‐looking information
Slide 4: Tye Burt, President & CEO
Tye Burt President & CEO 4
Slide 5: Kinross and Red Back: A Winning Combination
Kinross and Red Back: A Winning Combination • Red Back’s unique assets complement Kinross’ skill set and portfolio o Tasiast is a world‐class growth asset in a new fast‐growing gold district o Kinross has the experience and financial strength to optimize Red Back’s assets and fast‐ track development
Slide 6: Growing Margins and Cash Flow per Share
Growing Margins and Cash Flow per Share Cost of Sales margin(4) Adjusted operating cash flow(5,6) ($/oz ) ($/oz.) ($ mm) $662 $271 $227 $481 Q2'09 Q2'10 Q2'09 Q2'10 (4) Refer to endnote #4. (5) Refer to endnote #5. (6) Refer to endnote #6. 6
Slide 7: Q2 2010 Highlights
Q2 2010 Highlights • Attributable production(2): 538,270 gold equivalent ounces • Attributable sales(2): 551,958 gold equivalent ounces • Cost of sales(2,3): $496/oz (co‐product); $459/oz (by‐product) • Record cost of sales margin(4) of $662/oz. (up 38% from Q2’09) • Closed acquisition of Underworld
Slide 8: Portfolio Optimizations
Portfolio Optimizations • Acquiring 100% of the Dvoinoye deposit and Vodorazdelnaya concession o High‐grade deposit located ~100 km from processing facilities at Kupol o Exploration potential at Vodorazdelnaya • Consolidatingg our interest in the Kupol p East and West exploration p license areas o A
Slide 9: Thom Boehlert, Executive Vice-President & CFO
Thom Boehlert Executive Vice‐President & CFO 9
Slide 10: Q2 2010 Results
Q2 2010 Results ( millions,, except (in p ounces and per p Q2'09 Q2'10 % Change share amounts) • Revenue increased 16% Gold equivalent production • Adjusted cash flow(5,6) up (2) 560,479 538,270 -4% (ounces) 20% Gold equivalent sales • Adjusted net earnings(6) up 583,607 551,958 -5% (ounces) (2) 34%
Slide 11: 2010 Guidance
2010 Guidance(7) Production and Costs Production Cost of Sales / Country Ounces (000s) % of 2010e total oz. Chile 350 – 380 17% $630 ‐ 680 Brazil 510 – 580 25% $490 – 555 Russia 495 – 525 24% $340 – 365 USA 690 – 745 34% $480 – 520 Total Kinross: (2) 2.2 mm oz. $460 ‐ 490 Other 2010e (mm) Capital ex
Slide 12: Tim Baker, Executive Vice-President & COO
Tim Baker Executive Vice‐President & COO 12
Slide 13: Operating Results
Operating Results Production Cost of Sales (oz ) (oz.) (US$/oz ) (US$/oz.) Fort Knox 86,270 $642 Round Mountain 46,927 $570 Kettle River 50,463 $305 Kupol 140,268 $307 Paracatu 118 101 118,101 $525 Crixas 18,076 $525 La Coipa 35,175 $822 Maricunga 42,990 $680 (2) Total Kinross: 538,270 $496 (2) Refe
Slide 14: Paracatu Continues to Perform Ahead of Plan
Paracatu Continues to Perform Ahead of Plan 117,472 118,101 $900 108,421 ounces) 85 772 85,772 Golld equivalent production (o Cost of SSales ($/oz) $600 $300 $0 Q3'09 Q4'09 Q1'10 Q2'10 14
Slide 15: Dr. Ken Thomas, Senior Vice-President, Projects
Dr. Ken Thomas Senior Vice‐President, Projects 15
Slide 16: Dvoinoye, Russia
Dvoinoye, Russia • Acquiring 100% of the Dvoinoye deposit and Vodorazdelnaya concession o Transaction expected to close Q3 2010 Dvoinoye deposit & • In anticipation of closing closing, Kinross has: Vodorazdelnaya y concession o Initiated construction of an all‐weather road o Constructed a temporary
Slide 17: Paracatu: At-site Expansion
Paracatu: At‐site Expansion 3rd Ball Mill • Installing 3rd ball mill to increase throughput • Procurement commitments at 75%; construction at site 23% • Majority of mill components delivered to site • Concrete pour for mill foundation to be completed by the end of August • All major construction pac
Slide 18: Paracatu: 3rd Ball Mill Update
Paracatu: 3rd Ball Mill Update Pouring concrete foundation for 3rd ball mill Mill shells and heads delivered to Paracatu 18
Slide 19: Maricunga
Maricunga • SART plant and ADR upgrades proceeding • Feasibility study for Optimization completed in Q2 2010 • Project could increase throughput to 26 mta from 16 mta, with incremental production of 90‐100k oz/yr at estimated cost of sales of $540‐560/oz • Concept: Concept update mining fleet; fleet
Slide 20: Lobo-Marte, Chile
Lobo‐Marte, Chile • Capital estimate: $575 – $650 million La Coipa • 47,000 tpd heap leach with SART plant • Operating costs expected to be $10.50‐$11.50 per Lobo‐Marte ~110 km tonne • Annual production: 350‐400k oz. per year (first five years of Maricunga full production) • Infill, geotechnical, co
Slide 21: Fruta del Norte, Ecuador
Fruta del Norte, Ecuador • 18,000 metre drill campaign completed • Pre Pre‐feasibility feasibility expected by year year‐end end Quito • Feasibility expected H1 2011 • Received Environmental License for La Zarza orebody; allows drilling for geotechnical, geotechnical hydrogeological, hydrogeological
Slide 22: Tye Burt, President & CEO
Tye Burt President & CEO 22
Slide 23: Key Objectives for 2010
Key Objectives for 2010 Declare increased reserves Complete Lobo Lobo‐Marte Marte pre‐feasibility pre feasibility study Close sale of 25% of Cerro Casale Complete 18,000 drill program at Fruta del Norte Complete investment in Red Back Mining Complete acquisition of Underworld R
Slide 24: Kinross Gold Corporation
Kinross Gold Corporation 25 York Street, 17th Floor Toronto, ON M5H 2V5 Tel: 416 416‐365‐5123 365 5123 Toll‐Free: 1‐866‐561‐3636 www.kinross.com 24
Slide 25: Endnotes
Endnotes 1) Based on a consensus of equity analysts’ gold production estimates for Kinross and/or Red Back, as of August 1, 2010. 2) Unless otherwise stated, gold equivalent production, gold equivalent ounces sold and cost of sales figures in this presentation are based on Kinross’ share of Kupol pr